What next for the coalition?

The net has been closing in on Prime Minister Ehud Olmert ever since the news broke of his alleged financial misdoings. The last three weeks have been little more than a relentless march towards his final political demise.

On Wednesday, this inglorious fate came a step closer with the announcement by Labour leader Ehud Barak that he would lead his 19 MKs out of the coalition without some major show of political remorse from Mr Olmert.

Few in the Israeli political establishment believe that Mr Olmert, despite his vast talent for political manouvering, can survive this fiasco. The charges are just too damaging, the legal case too substantial, and the public disgust too great.

If he suspends himself until the end of the investigation, as Mr Barak suggests, his deputy and bitter rival Tzipi Livni automatically steps into the breach. The coalition could theoretically continue unchanged.

If he resigns — which under Israeli law he would have to do if indicted — Ms Livni would also take on his role, but would then need to remake the government afresh, with all the horse-trading and new demands that that would entail.

For all his bluster, Mr Barak is unlikely to favour new elections. If held now, Likud leader Binyamin Netanyahu would be far and away the likely winner. There has been speculation that this latest charge from Mr Barak has been co-ordinated with Ms Livni, so as to position her as premier, saving both Kadima and Labour from having to participate in damaging polls. Mr Olmert’s enmity towards his foreign minister has led some to suggest he may move to fire her and appoint someone such as Transportation Minister Shaul Mofaz as the lesser of two evils.

The short-term outlook for any kind of stability is not good. Mr Barak and Ms Livni are both far from strong within their own parties. The cabinet is riven with dissent, with no one figure strong enough to take the lead themselves.

Mr Olmert may fight the inevitable with enough force to drag it out for some more months — indeed, he is tripping off to the US in the coming days, seemingly without a care in the world. However the cards fall, Israel is facing another period of political uncertainty.